WHAT ARE THE DISADVANTAGES OF HAVING A LIVING TRUST?
All assets need to be re-titled into the name of the trust. Transfer documents need to be prepared, including but not limited to, quitclaim deeds, letters of instruction and assignments. In addition, beneficiary designations may need modification to reflect the existence of a revocable trust.
The use of a revocable trust requires ongoing monitoring to ensure that assets remain titled in the name of the trust and that newly purchased assets are titled in the name of the trust. For example, a Trustor who moved a CD to obtain a better interest rate, must remember to advise the new institution to title the new account in the name of the trust. trust
DO I NEED A TRUST IF I HAVE A WILL?
Yes. A special type of will referred to as a “pour over will,” works hand-in-hand with the revocable trust and acts as a safety net, in the event you forgot to re-title an asset in the name of your trust. This legal document is included in your estate plan.
ADVANTAGES OF A TRUST VERSUS A WILL?
Apart from avoiding probate, there are other advantages to using a revocable trust in your estate plan.
· If an illness or accident leaves you incapacitated, your successor trustee can handle your financial affairs without the need of a court appointed guardian or conservator.
· If the beneficiaries of your trust are minor children or others who might not use an inheritance as you intend, the trust can continue to hold the assets until they reach a more mature age.
· If you own real property in more than one state, you avoid the expense, time and hassle of multiple probate proceedings.
· By using the “A-B” provision in a trust, a husband and wife can pass the maximum estate tax exemption to their heirs.
DO I NEED TO FILE A SPECIAL TAX RETURN?
No. As long as one or both of the trustees are alive, no special returns are required.
DOES MY TRUST NEED TO BE RECORDED?
No. Most states, including California, do not require revocable trusts to be recorded. Simply sign and notarize the document to make it valid.
WILL HAVING A TRUST PREVENT FROM SELLING OR REFINANCING MY PROPERTY?
No. Selling your property proceeds the same as before. If you are refinancing, some lenders may require that you take the property out of the name of trust during the loan process, but we can prepare the deed to transfer title back into the name of the trust.
WHAT DOES IT COST TO SET UP A TRUST?
On average, most firms charge between $2,000 to $3,500. When shopping for the best price, make sure that the following documents are included:
- Revocable Living Trust
- Pour-Over Will
- Financial Power of Attorney
- Advance Health Care Directive
- Transfer/Funding Letters (Trust Particulars)
- A-B Provision (Married Couples)
- Asset Schedules and Deed Transfer(s)